The Real Deal New York

Fairway eyes Chelsea location: sources

Market could open 7th city store near Whole Foods, Trader Joe’s

January 24, 2013 03:00PM
By Adam Pincus

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Chelsea Landmark

The rapidly expanding grocery chain Fairway Market is expected to open its seventh New York City store at the base of the 406-unit Chelsea Landmark rental building, several retail brokers told The Real Deal. The 23,000-square-foot location at 766 Sixth Avenue has 200 feet of frontage on the avenue, and includes 17,007 square feet on the ground floor and 7,310 square feet of selling space in the basement. Landlord Rose Associates was offering the space for $2.9 million per year, or about $150 per square foot on the ground, a source who had reviewed marketing material, said.

Fairway opened its sixth city store in Kips Bay in December, in a 42,000-square-foot space at 550 Second Avenue at 30th Street.

An outside spokesperson for Fairway said, “No lease had been signed.” Rose Associates did not immediately respond to a request for comment. Fairway was purchased by the Westport, Conn.-based Sterling Investment Partners in 2007

Rose leased the space to Spirit Halloween for short-term leases in 2011 and 2012 as a pop-up location for the holidays. Clothing retailer American Apparel was another temporary tenant in the space, signing a short-term deal in December 2011. The previous permanent tenant had been the home furnishings retailer Gracious Home, which signed a 20-year lease for the 23,000-square-foot space with a ground floor asking rent at the same level, $150 per foot, an article from December 2007, says. However, the chain filed for bankruptcy in August 2010 and closed the store later that year.

“I think they expanded the business quickly in challenging times, and they had to downsize and go back to their initial concept, which is smaller,” Robin Abrams, an executive vice president focusing on retail leasing at brokerage Lansco, said of Gracious Home. She was not involved in the anticipated Fairway lease.

Abrams noted that nearby is a Whole Foods, which opened in 2001 at 250 Seventh Avenue at 24th Street, and a Trader Joe’s, which opened after inking a lease in 2009 for space at 675 Sixth Avenue, at 22nd Street. “Now with Fairway, there will be significant competition for the residents in the neighborhood,” she said.

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